10 Techniques for a Successful Real Estate Negotiation

n a negotiation the object is to obtain the Buyers Maximum and Sellers Maximum Price

If you have sold your property or you are currently negotiating a contract would you take the opportunity to ask the buyer whether or not they would or could pay more?

In our experience when this question is asked there are generally 2 answers.

“Yes, I would have paid more though I wasn’t asked to” or “No, I paid top dollar and wouldn’t have paid anymore”.

So how do you know the buyer has paid their maximum price and you have not sold for your minimum price?

Here are a few more questions.

Have you received the highest possible price for your property?

How do you know you have received the highest possible price?

Do you know if your purchaser has paid their maximum?

How do you know what the buyer’s maximum price is?

Have you accepted your minimum price for your sale price?

Have you accepted a price that “you” could have achieved without a real estate agent?

Most real estate agents (and this is based on our experience) do not ask themselves the following questions on your behalf.

“Will this buyer pay $100 more for my clients’ property”?

If they do not, they are NOT acting in your best interest and unfortunately a lot of agents are like this. They will ask you to accept your lowest price.

99% of the value of the remuneration you pay real estate agents is for that real estate agent to negotiate on your behalf.

Anyone can put up a sign and advertise a property for sale, but negotiating the best possible price, is a skill that separates any agents from great agents.

An expert is required to negotiate and receive the highest possible price for your property.

Ask your real estate agent if they could have received an extra $500 from your buyer just before you agree to sign. If the answer is ‘yes’, then we implore you to send them back and instruct them to do what they are supposed to do and negotiate the highest possible price for YOU. This then becomes Buyers Maximum price and not YOUR Minimum price.

Willing Buyer + Willing Seller is the definition of a Valuation.

Some agents will tell you a property is valued at, or worth, what a buyer is willing or wants to pay. We believe a property is worth what we as your agent can persuade the buyer to pay, NOT what they want to pay.

Here’s what your agent needs to know and execute in your best interests:

1. Be Polite and be Courteous

The negotiation process should be an enjoyable experience and using the right timing and having the ability to remain calm and respectful will only assist the process towards achieving a positive result for all parties.

2. Don’t be afraid to ask for what you want

Successful negotiators are assertive and challenge everything – they know that everything is negotiable. Being assertive means asking for what you want and refusing to take NO for an answer.

Aggression is often used to achieve a result. However practicing being assertive will take care of your interests while maintaining respect for the interests of others. When you manage your own interests ahead of the others and with a lack of respect then you are negotiating aggressively.

3. Listen

The most popular word in the English language (or any other language for that matter) is “I”. Therefore it stands to reason that most people love hearing themselves talk.

Communication is imperative in any negotiation. Negotiators search for that one point that will bring the two parties together and create a platform for a result. Good negotiators ask probing questions and then listen.

The other party will tell you everything you need to know – all you have to do is listen.

Follow the 90/10 Rule – listen 90% of the time, talk 10 % of the time. Ask lots of open-ended questions sit back and relax and listen and you’ll be amazed at what you hear.

4. Homework

Be prepared. So many times we sit at the negotiation table and think “I wish I would have known that” or “If only I found that out before I left the office.

Keep asking yourself a few simple questions before entering into the negotiation process.

What are my clients’ needs?

Are they under any pressure and if so what can I do to alleviate the pressure?

What options do my clients have?

What if they struggle to make a decision because of emotional stress?

What if I’m dealing with a first home buyer who has the family expert offering advice?

Doing your homework is vital to successful negotiation. You can’t make accurate decisions without understanding both sides of the process. The more information you have about the people with whom you are negotiating, the stronger you will be.

People who consistently leave money on the table probably fail to do their homework.

5. Always be willing to walk away

Never negotiate without options. If you rely too much on the positive outcome of a negotiation, you lose your ability to say NO.

When you say to yourself, “I will walk if I’m unable to secure a negotiation that is satisfactory,” the other side perceives that you mean business. Your resolve will force them to make concessions. If you don’t consider the option of walking away, you may be inclined to cave in to the other side’s demands simply to make a deal.

6. Take the Time

Being patient is trying for many people. Whoever is flexible about time has the advantage. Your patience can be challenging to the other party if they are in a hurry as they start to believe that you are not under pressure to conclude the transaction. So what do they do? They offer concessions as a means of providing you with an incentive to say YES.

7. Aim high and expect the best outcome

Successful negotiators are optimists. If they expect more, you’ll get more. Be sure to show a confidence level that is honest and caring as either party will be able to pick up on an attitude of “Ego”.

8. Show the other party how their needs will be met

Successful negotiators always view the situation from the other party’s perspective. Everyone looks differently at the process so stay ahead of the negotiation by using role reversal techniques.

Ask yourself: If this was me, what would I be doing and what would I want to achieve. Act on these thoughts and you will find yourself thinking a differently and producing a better result for your client.

9. Concessions

Whenever you give something away, receive something in return. It’s the give and take principal or I’ll do this if you do that.” When you give something away without requiring the other party to reciprocate, they will feel entitled to your concession, and won’t be satisfied until you give up even more. If they have to earn your concession, they will derive a greater sense of satisfaction than if they received it for nothing.

10. Don’t take the issues or the other person’s behaviour personally.

Rogue or inexperienced negotiators fail due to taking comments from either party personally. Should the negotiation start to derail then it is imperative that you try to understand their behaviour as the behaviour maybe unrelated to the process.

Conclusion

Everyday most of us need to negotiate on something of value, and most of us wish we would have paid less. Its a natural feeling and we all feel it at some time.

At Ray White Lutwyche our team focuses on a result that allows both parties to walk away with a feeling of success. We must obtain the highest possible price on behalf of our owners as this is what we are expected to deliver.